Abstract: An air handling system including at least one terminal unit for maintaining a serviced volume at a predetermined temperature with constant or variable volume control wherein a thermal energy wheel provides heat transfer between the outgoing and inflowing air streams provided by the air handling system via the terminal unit. The heat transfer between air streams is regulated as a function of air velocity and temperature differentials as measured at various points in system which are related specifically to the serviced volume. The regulation is exercised by controlling the angular velocity of the means for transferring thermal energy.